The USDA’s Agriculture and Food Research Initiative is looking to researchers from Arizona State University’s (ASU’s) W. P. Carey School of Business to find solutions to food waste.

“In Arizona and around the country 18% of landfills is food waste, according to the United States Environmental Protection Agency (EPA) – and that may be a conservative number,” says Tim Richards, Marvin and June Morrison Chair in Agribusiness at the W. P. Carey School.

“If we can figure out a way to better utilise food that would otherwise be wasted we can minimise what goes into our landfills and, more importantly, make better use of the water that’s used to irrigate plants, saving 25% of our freshwater supply each year.”

Easy to use mobile apps

Two unique research projects are being funded by the USDA’s Agriculture and Food Research Initiative. The first project will test online marketplaces and mobile apps. These emerging sharing economy companies could help farmers, restaurants, retailers and households manage problems with day-to-day food waste. For example, if a farmer has a box of ugly fruit or tomatoes that won’t sell in the supermarket because they’re too big for the grocery store display, he can use an online platform to let others know he has a surplus of food. Consumers then visit the app or website, select the items they want, and the app coordinates delivery logistics and payment for the farmer.

Researchers at ASU are teaming up with Imperfect Foods, a startup delivery company based in San Francisco to test market theories and demand conditions. In addition, the experiment will use 400 business school students at Arizona State University and California Polytechnic State University to measure their use of food waste.

Scan-based trading

A second ASU research project will put scan-based trading (SBT) under the microscope. SBT is a newer type of contract used by food suppliers and retailers like Walmart and Target, where the supplier retains ownership of the inventory in stores, until the product is scanned at the register for check-out by the customer.

Suppliers such as dairy producers or bakery vendors are responsible for keeping products in stock, while the retailer provides vendors with valuable shelf space and its employees manage that space. Any loss of product between delivery and checkout is typically the responsibility of the supplier, not the retailer.

One major problem in SBT is ‘shrink,’ the loss of product between delivery and checkout – anything from expired inventory, broken cartons and even theft. This could mean a loss for the supplier under an SBT contract, who may decide to increase wholesale prices to cover its losses. The retailer could then pass that increase along to customers by raising prices, according to lead investigator Elliot Rabinovich.

“We hope to explore the causes of shrink and how to address it. Can suppliers do a better job at managing it? Or do retailers need to have greater sensitivity – regardless of whether they own the inventory or not,” said Rabinovich, a supply chain expert and John G. (surname)? and Barbara A. Bebbling, Professors of Business at the W. P. Carey School. “It’s not finding out who’s at fault, it’s how do we work together.”

SBT contracts do have benefits, including giving suppliers access to real-time sales information from retail checkouts and the flexibility of replenishing stock in-store, without having to go through a distribution centre which traditional contracts often require.–



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